Facebook and the Federal Trade Commission have officially reached a settlement agreement over a nearly 18-month investigation into the social media giant's practice of sharing user data with third parties without their consent.
The settlement, which had been previously reported and expected, was announced Wednesday morning. Facebook will pay a $5 billion fine to the government ー the largest privacy-related fine and largest fine of a tech company ever, by an order of magnitude. The company will also agree to have CEO Mark Zuckerberg personally "certify" every quarter that Facebook is in compliance with new privacy provisions imposed by the FTC. Facebook will create a new committee as part of its board to oversee those compliance efforts. If Zuckerberg gave false certifications, he could be subject to criminal and civil penalties, according to the FTC's statement.
Facebook does not admit guilt to any missteps as part of the deal.
In a statement, Facebook General Counsel Colin Stretch said the agreement presents a "sharper turn toward privacy, on a different scale than anything we’ve done in the past.” The company also announced a separate, far smaller, settlement with the SEC over a different investigation into its handling of user data. That settlement included a $100 million fine.
For Facebook ($FB) ー which saw its shares go up after the first reports of the record penalty ー it remains unclear how, or if, the settlement will substantively change its business model, which relies mainly on serving advertisements based on the mountains of data it collects from its 2+ billion users.
In a sign of Facebook's scale and intertwining services, the settlement comes the same week as a new report found that the company discovered a bug in its Messenger Kids platform that allowed strangers to add young children to group messages without their parents' knowledge. Facebook publicly disclosed that bug only when contacted by The Verge.
Nestlé has dismissed its CEO Laurent Freixe after an investigation into an undisclosed relationship with a direct subordinate. The company announced on Monday that the dismissal was effective immediately. An investigation found that Freixe violated Nestlé’s code of conduct. He had been CEO for a year. Philipp Navratil, a longtime Nestlé executive, will replace him. Chairman Paul Bulcke stated that the decision was necessary to uphold the company’s values and governance. Navratil began his career with Nestlé in 2001 and has held various roles, including CEO of Nestlé's Nespresso division since 2024.
Kraft Heinz is splitting into two companies a decade after they joined in a massive merger that created one of the biggest food companies on the planet. One of the companies will include brands such as Heinz, Philadelphia cream cheese and Kraft Mac & Cheese. The other will include brands like Oscar Mayer, Kraft Singles and Lunchables. When the company formed in 2015 it wanted to capitalize on its massive scale, but shifting tastes complicated those plans, with households seeking to introduce healthier options at the table. Kraft Heinz's net revenue has fallen every year since 2020.
